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Changing lives in rural India. Rationale . The private sector can contribute to social development even if governed by business objectives Developmental initiatives from the private sector will be sustainable and scalable only if they make business sense. Unilever in India.

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Presentation Transcript
rationale
Rationale

The private sector can contribute to social development even if governed by business objectives

Developmental initiatives from the private sector will be sustainable and scalable only if they make business sense

unilever in india
Unilever in India
  • Unilever has been in India since 1895
  • Hindustan Lever formally incorporated in 1956
    • A subsidiary of Unilever (51.5%)
    • Most sought after recruiter among India’s B schools
  • Source of employment
    • 15,000 permanent employees
    • 200,000 indirect jobs
hindustan lever limited
Hindustan Lever Limited
  • A $ 2.2 billion company
    • 16% operating margin
    • Market Capitalization: $14 billion
  • Market Leader across categories
    • Fabric wash, Personal wash, Dish wash, hair wash, skin applications, Talcum powders, packet tea, Jams
    • Number two: Toothpaste, instant coffee, ketchup
  • 23 of India’s 150 most trusted brands
    • 9 in top 20
the sales and distribution challenge
The sales and distribution challenge
  • Seven million distinct outlets
    • one for every 29 households
  • 59% of these stores are in rural India
  • Organized modern retail formats very nascent
    • Multinational presence restricted by government
  • Unilever directly services over 1 million stores
    • A network of over 7000 stockists and distributors
unilever sales distribution in india
Unilever: Sales & Distribution in India

Modern Trade

Organized retail

Self-service stores

General Trade

Wholesale

Family grocer

Marginal retail

Rural Trade

Multi-purpose retail

rural india challenge and opportunity
Rural India - challenge and opportunity
  • 775 million Indians in 638,000 Indian villages
    • 1 in 8 people on this planet is an Indian villager
    • 4 million distinct outlets
  • A different life
    • 44% of urban per capita income
    • Low literacy, media reach: 624 million people lack access to TV
    • 30 million homes remain under the poverty line
  • A case for business
    • 52% of domestic product, 60% of consumption expenditure
    • Share of agriculture less than 50% of the rural economy
    • 50% decline in poor households, doubling of mid-income homes
rural india challenge and opportunity8
Rural India - challenge and opportunity
  • 775 million Indians in 638,000 Indian villages
    • 1 in 8 people on this planet is an Indian villager
    • 4 million distinct outlets
  • A different life
    • 44% of urban per capita income
    • Low literacy, media reach: 624 million people lack access to TV
    • 30 million homes remain under the poverty line
  • A case for business
    • 52% of domestic product, 60% of consumption expenditure
    • Share of agriculture less than 50% of the rural economy
    • 50% decline in poor households, doubling of mid-income homes
1 reach

Reachingmarkets

Reachingconsumers

and

#1:Reach
slide10

IndirectCoverage

Direct Coverage

Accessibility

Streamline

Turnover per market

HLL’s approach to rural distribution

direct coverage

Factory

Direct coverage

Stockist / Distributor

Trade

Depot

indirect coverage

Village 3

Village 4

Stockist

Village 2

Village 5

Village 1

Indirect Coverage
slide13

Star seller

Star seller

Star seller

Streamline

Distributor

slide14

IndirectCoverage

Direct Coverage

Accessibility

Streamline

Turnover per market

HLL’s approach to rural distribution

Direct reach: 16% of villages

women in rural india
Women in Rural India
  • Population: 361 million
    • 946 per 1000 vs. 901 in urban
  • Greater involvement in work force
    • 31% of rural women, vs. 11% in urban
    • India’s women earn $ 1,569 per capita, men $ 4,130 (PPP)
  • Access to education

India’s most marginalized group

slide16

The role of micro-finance

  • The self-help group
    • Grameen Bank: mutual thrift societies of village women
    • A rapidly spreading movement: 6 million groups in India
    • 70% of rural households in AP
  • A micro-finance revolution
    • 8 million families have received micro-credit
    • 76% of micro-credit recipients have crossed the poverty line
    • 95% of micro-credit recipients are women
    • Effectiveness depends on opportunities for micro-enterprise
slide17

The role of micro-finance

Low Income

Low Savings

Low Investment

slide18

The role of micro-finance

Income

+

Micro-Enterprise

Micro-Credit

Investment

Savings

the shakti entrepreneur program
The Shakti Entrepreneur program
  • Micro-enterprise opportunity
  • Underprivileged rural women are appointed as Shakti Entrepreneurs and trained to manage micro-businesses
  • Average earnings per entrepreneur: $16 per month
    • doubling monthly household income
    • supplementing other income
  • Piloted in 2001, scaled up rapidly
    • Now a network of 25,000 entrepreneurs in fifteen states
impact
Impact
  • A network of local, credible brand endorsers, reaching 100 million people
  • Market growth and brand equity
    • significant increase in penetration and market shares
  • 15% of HLL’s rural business in districts of operation
  • Deterrent to counterfeits
    • counterfeit industry is 10-15% of total
  • Unique direct to consumer channel
    • Contact with two million rural homes every month
shakti vani
Shakti Vani
  • Social communication anchored on brands
    • health and hygiene
    • women’s empowerment
  • Village women are recruited as Vanis and trained to communicate
  • Vani audience: key opinion leaders, schools, SHG meetings, other village gatherings
  • Specially designed communication material
    • easy-to-carry kit: flip-charts, leave-behind posters, banners
    • content developed after in-depth understanding of local context
3 influence

Achievingcontact

ImpactingBehavior

and

#3:Influence
shakti activities
Shakti Activities

Free Health Camps in Shakti Village

ishakti
iShakti
  • Rural community portal that creates access to information
  • Villagers can register as users and surf content areas:
    • Agriculture, health, veterinary services, education, employment opportunities, education, personal grooming, entertainment, games
  • All content backed by local language voice-over
  • On all content areas, users can pose queries
  • 1,000 kiosks in AP, partnership with government
slide29

Vision 2010

500,000

villages

600million

Consumers

100,000

Entrepreneurs

Shakti shall reacheveryhome in everyvillage,createsustainable livelihood opportunities, and enhancethe quality of life in rural India

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